While the VW Group honchos probably aren't too concerned about which vehicle a customer buys-as long as it stays in the family-after driving the new Touareg, we're pretty sure it can stand its ground against the premium SUV competition, up to and including its Q7 and Porsche Cayenne group-mates.

In FSI V-6, TDI diesel, or hybrid forms, the Touareg is Volkswagen's U.S. flagship model, pushing the automaker higher into luxury territory as the new Jetta and upcoming New Midsize Sedan get cheaper for the U.S. market. The sizable price gap between a loaded Tiguan and base Touareg force us to further question Volkswagen's pursuit of the midsize luxury crossover market.

The Touareg's serious weight loss will help it compete, but at 4711 pounds for the FSI V-6 model, it is still a hefty vehicle. It shows in the sturdy way it drives. Volkswagen's new eight-speed automatic transmission is standard on all three models, contributing to impressive fuel economy gains. The double control-arm suspension uses aluminum, also aiding efficiency.

No longer does the Touareg lag behind the segment leaders in fuel economy. The FSI V-6 model achieves 16/23 mpg city/highway, while the TDI's 19/28 mpg rating boosts it slightly above the diesel offerings on the 2011 Mercedes-Benz ML and BMW X5. The limited-availability Touareg Hybrid is expected to be rated 21/25 mpg -- not bad for a 380-horsepower, 5135-pound all-wheel-drive SUV.

Neither is the interior, which lives up to Volkswagen's reputation-excepting the U.S.-spec Jetta, of course. Aside from oddly placed side mirror adjustment controls, the Touareg's interior isn't difficult to use and is quite attractive, especially with the optional wood trim complementing the silver trim. The exterior is sufficiently upscale as well, though subdued. The 2011 Touaregs don't look dramatically different from the outgoing model, but the new SUV's LED daytime running lights and Mazda6-like chrome exhaust pipes distinguish the two VWs.

A $4000 price jump also separates the old from the new Touareg. Volkswagen's approach on the 2011 Touareg is to offer Acura-like standard equipment. A $45,270 Touareg VR6 FSI Sport includes all-wheel drive, a rearview camera, 18-inch alloy wheels, HIDs with Adaptive Front-lighting System, and a navigation system with an 8-inch screen. Try building an Audi Q7 with some of those features and watch the price shoot skyward. Jump to the Touareg's Lux trim for $3850 if you want features like a panoramic sunroof, Vienna leather seats, 19-inch alloy wheels, wood trim, 12-way power driver's seat, and an electric rear seat release.

Go full out with the Executive trim and you'll get 20-inch alloy wheels, heated rear seats, keyless access and push-button start, upgraded sound system, and sensors to prevent you from scuffing your $54,820 Volkswagen's front and rear bumpers. The TDI is priced $3500 higher for each trim level.

The VR6 drives well and will likely account for most Touareg sales. Power comes from a 280-horsepower 3.6-liter V-6 producing 265 pound-feet of torque. Moving from 0-60 mph on a highway on-ramp will take 7.4 seconds, according to VW. At wide open throttle, the engine sounds energetic but the hefty Touareg doesn't feel that quick. Steering is communicative, the brakes are responsive, and as long as you don't treat the Touareg like a GTI, body roll is kept under control. Wind noise is reduced as much as can be expected for an SUV like this.

Much the same is true for the diesel (legal in all 50 states), which has the added bonus of a highway fuel range allowing a drive from Los Angeles to Las Vegas and back, with about 200 miles left in the 26.4-gallon tank-assuming you match the anticipated 28 mpg highway rating. The engine note isn't as engaging as that of the VR6, but the diesel is suitably quiet. Acceleration from 0-60 mph is said to take 7.9 seconds. Power figures are unchanged from last year's model at 225 horsepower and 406 pound-feet of torque. All Touaregs have a 7700-pound towing capacity, provided you buy the $500 trailer hitch.

That includes the Hybrid model, which tops the other two powertrains in horsepower and torque. This should be no surprise as the Hybrid effectively replaces the last-generation V-8 Touareg. At the top of the 2011 Touareg lineup, the Hybrid retails for $61,385 in one well-equipped model, but only 200 dealers will sell it. The Hybrid uses a 3.0-liter supercharged V-6 with an electric motor and nickel metal-hydride battery pack, replacing the spare tire on other models with hybrid components. Luggage capacity behind the second row remains the same for every Touareg: 32.1 cubic feet. That compares to 29.4 on the Mercedes-Benz ML, 35.8 on the BMW X5, and 42.9 on the Acura MDX.

Punch the throttle on the Touareg Hybrid and the SUV will often hesitate for a moment and then accelerate. Once you're off, 0-60 mph acceleration is brisk, at a claimed 6.2 seconds. Unlike the other two Touaregs, steering feel is lacking. Be careful with the brakes as occasionally the SUV will surprise with more force than you expected. Regenerative braking works during braking and coasting; Volkswagen says the vehicle can drive up to about 30 mph on electric power on a level road or up to 75 mph going downhill. Touareg Hybrid drivers on the autobahn will be pleased to know that the engine will stop (in coasting mode) at speeds of up to 99 mph if your foot is off the gas pedal. Volkswagen said the significant differences between the Touareg and Porsche Cayenne hybrids will come with changes to the suspension and vehicle packaging.

The Touareg Hybrid should perform adequately if you don't need the snob appeal and minor suspension tweaks on the Cayenne Hybrid. The Porsche, like the Audi Q7, offers a four-year/50,000-mile warranty to the Volkswagen's three years and 36,000 miles basic coverage, plus three years of complimentary scheduled maintenance. Were we in the market for a $50,000 luxury SUV, the warranty might be a concern-the Volkswagen Touareg isn't exactly known as the most reliable vehicle in its segment. That could change with the 2011 model's added efficiency and refinement. If buyers can look past the badge, the Touareg stands a chance at sustained growth in a tough segment.